Transport forecasts are made for many purposes, some include; to determine future transport network needs and to be able to forecast the effects of certain policies, for example, and increase in road pricing. Forecasting is useful, however the data is an estimate and can be collected in a number of ways, therefore there can be problems associated with forecasting future trends in Transport Market.
One way in which future trends are forecasted in the transport market is through estimating transport elasticities, this can be used to show the responsiveness of demand to a change in price, income or price of another good. There can be problems associated with both the collection of the data, and the problems that may arise due to data being deceiving. Problems with the collection of data could be that the data is just an estimate; for example, secondary data can be used, which involves using past records and data to predict future behaviour, if the data used is wrong, or from a different economic climates, the overall forecast could be wrong. If this data was wrong and stated that PED was less than one, this may cause transport companies to think that transport was now inelastic and therefore raise the prices. If this was untrue or deceiving then transport markets would see a decrease in the demand for public transport, therefore causing problems.
Another method used in forecasting is the Delphi Method, this involves consulting experts and using their specialist knowledge to assess the impact of changes on the market. Although this can be useful in predicting the effect of changes in price on sales or the effect of a likely recession on demand, it may also cause problems perhaps due to the experts knowledge being biased towards a certain outcome (if they were pro-private vehicle), or perhaps having different experts with conflicting ideas.
